Management Theories

Management theories are concepts surrounding recommended management strategies, which may
include tools such as frameworks and guidelines that can be implemented in modern organizations.
Generally, professionals will not rely solely on one management theory alone, but instead, introduce
several concepts from different management theories that best suit their workforce and company
culture. For a long time, theorists have been researching the most suitable forms of management for
different work settings. This is where management theories come into play. Although some of these
theories were developed centuries ago, they still provide stable frameworks for running businesses.

Until the day that machines are able to think, talk, and experience emotions, humans will remain the
most complicated beings to manage. Humans can never achieve the kind of error-free performance
that machines provide. On the upside, there are tons of things that machines aren’t capable of doing,
making humans indispensable assets. For such reason, proper management is one of the most crucial
things for an organization.

Why Study Management Theories?

1. Increasing Productivity

One of the reasons why managers should be interested in learning management theories is because it
helps in maximizing their productivity. Ideally, the theories teach leaders how to make the most of the
human assets at their disposal. So, rather than purchase new equipment or invest in a new marketing
strategy, business owners need to invest in their employees through training.

It can be seen in Taylor’s scientific management theory. As mentioned earlier, Taylor proposed that the
best way to boost workers’ productivity was by first observing their work processes and then creating
the best policies.

2. Simplifying Decision Making

Another area where management theories have proven to be useful is in the decision-making process.
Max Weber proposed that hierarchical systems encourage informed decision-making. A report written by
the Institute for Employment Studies suggests that flattening the hierarchy paves the way for local
innovation while speeding up the decision-making process. Flattening out entails getting rid of job titles
and senior positions so as to inspire a cohesive work environment.

3. Encouraging Staff Participation

Management theories developed in the 1900s, aimed at encouraging interpersonal relationships in the
workplace. One such theory that encouraged a collaborative environment is the human relations
approach. According to this theory, business owners needed to give their employees more power in
making decisions.
1. Scientific Management Theory

American mechanical engineer Frederick Taylor, who was one of the earliest management theorists,
pioneered the scientific management theory. He and his associates were among the first individuals to
study work performance scientifically. Taylor’s philosophy emphasized the fact that forcing people to
work hard wasn’t the best way to optimize results. Instead, Taylor recommended simplifying tasks so as
to increase productivity.

The strategy was a bit different from how businesses were conducted beforehand. Initially, a factory
executive enjoyed minimal, if any, contact with his employees. There was absolutely no way of
standardizing workplace rules and the only motivation of the employees was job security.

According to Taylor, money was the key incentive for working, which is why he developed the “fair day’s
wages for a fair day’s work” concept. Since then, the scientific management theory has been practiced
worldwide. The resulting collaboration between employees and employers evolved into the teamwork
that people now enjoy. Scientific management theory is a method of improving efficiency in the
workforce. As its name implies, this management theory uses scientific methods to assess work
processes.

The scientific method consists of three steps: observation, experimentation, and analysis. In science, this
could mean observing the effects of a treatment, experimenting with a different treatment, and
analyzing the results. Similarly, managers use scientific management theory to observe their workplaces,
test different methods of completing tasks, and analyze the effect of the changes.

When properly implemented, scientific management theory improves productivity. It is an evidence-

based method that prioritizes efficiency and reliability. Having scientifically rigorous work methods in
place creates clear expectations for employees because it establishes a single right way to do things. It
also gives managers a unified standard against which to evaluate their employees.

Scientific management theory has grown exponentially since its inception. There are now a variety of
management strategies that fall under the umbrella label of scientific management theory. Each of these
strategies has its own set of strengths and weaknesses. It’s important to do your own research into
scientific management theory to find the best applications for it in your workplace.

The History of Scientific Management Theory

The history of scientific management theory begins with 20th century mechanical engineer Frederick
Winslow Taylor. In Taylor’s time, America was on the cusp of industrialization, but management
methods had not yet changed to keep up with changes in technology. While working at a steel
manufacturing plant, Taylor observed several production problems.

For one thing, there was little specialization of labor or tools. Work shifts were randomly assigned, so
inexperienced workers often ended up trying and failing to complete important projects. Tools were
crude, and since only a small number of tools were used for every task, they wore out quickly. For
another, there was no one single “best” standard for workers to aspire to. Everyone did their job in
whatever way they thought worked best, regardless of whether it was effective. Finally, managers were
completely disconnected from the workers they supervised. The average manager had no idea how the
workers’ tasks were performed, so they were unable to provide suggestions for improvement.
Taylor set out to solve these problems. He designed specialized shovels and other tools. He advocated
for workers to be matched to the projects for which they were most naturally gifted. He trained
managers in his methods so that they could implement scientific management theory in their own
workplaces.

Taylor is credited with revolutionizing productivity in the American workforce. At his own steel plant, the
amount of pig iron the workers could transport in a day reportedly tripled once they adopted his
methods. His ideas spread rapidly and helped give rise to the Industrial Age. Scientific management is
sometimes even referred to as “Taylorism” in his honor.

Taylorism and Classical Management Theory

When people talk about “Taylorism,” they often mean scientific management theory as it existed in the
early 20th century. This specific management style is also called classical management theory.

Classical management theory is distinguished by three characteristics: hierarchical structure,

specialization, and financial incentives. In a company operating on classical management theory, there is
a rigid hierarchy. Business owners are on top, supervisors are in the middle, and regular employees are
on the bottom. Everyone has a specialized, small-scale task. Anyone who is especially successful is
rewarded with financial benefits.

Classic Taylorism does a good job of addressing the physical needs of workers, but it ignores social needs
and creativity. Inflexible hierarchies make it difficult for talented people to rise the ranks of leadership.
Specialization is efficient, but it discourages people from experimenting, and therefore prevents the
development of new methods. And although good pay incentivizes good behavior, money isn’t the only
thing workers care about. Employees also want to feel valued and take pride in their work.

Classical management theory is no longer widely followed, but it still has uses. Since Taylor developed his
theory while working in a manufacturing plant, classic Taylorism is well-designed for manufacturers. It
also tends to function better in small enterprises where everyone knows each other, and social needs are
easy to address.

The Principles of Scientific Management

There are four principles of Taylorism.

1. Choose methods based on science: Use the scientific method to determine the most efficient
way to complete a task. Focus on increasing productivity and profits.

2. Assign workers to tasks based on their natural skillset: Get to know your workers, discover what
they’re good at, and place them where their skills will be the most useful.

3. Monitor your workers’ performance: Observe what your workers are doing while they are on
the clock so that you can quickly address any problems. If some workers are confused or
unproductive, it is up to their managers to step in and fix the issue.

4. Divide workloads appropriately between workers and managers: Make sure that managers
understand how to plan and train workers and that workers understand how to implement those
plans.
Goals and Objectives of Scientific Management

The primary goal of scientific management is to increase efficiency. When Taylor began his scientific
management experiments, he focused on increasing efficiency by reducing the amount of time needed
to perform tasks. This was a good first step, but there’s a lot more to improving efficiency than just
decreasing work time. Since Taylor’s time, other innovators have found more ways to increase efficiency,
such as implementing automation software.

Another objective of scientific management theory is increasing profits. If everyone is working as

efficiently as possible, then they should be able to produce huge amounts of high-quality products. That
translates into more sales and bigger profit margins.

Real-World Applications of Scientific Management Theory

Scientific management theory is flexible enough to be applied in just about any industry. Whether you’re
designing software or selling real estate, there are certain tasks that need to be done regularly.
Identifying those tasks and optimizing them for efficiency is a great way to bring Taylorism into your
workplace. Here’s an example.

Imagine your company has a newsletter mailing list. Every time a new person wants to be added to the
mailing list, they send an email requesting to be added. An employee then manually adds them to the
list.

This is an inefficient, multi-step method of adding newsletter subscribers. Your employee probably
doesn’t get any job satisfaction from typing a name into a mailing list. Moreover, the time spent
manually adding names is time that could be spent on more pressing projects.

If you were the manager tasked with implementing the principles of scientific management in this
company, you might suggest designing a system that automatically adds people to the mailing list as
soon as they submit a request. The subscribers get newsletter access sooner and the employee now has
more time to concentrate on important assignments.

2. Systems Management Theory

Systems management offers an alternative approach to the planning and management of organizations.
The systems management theory proposes that businesses, like the human body, consists of multiple
components that work harmoniously so that the larger system can function optimally. According to the
theory, the success of an organization depends on several key elements: synergy, interdependence, and
interrelations between various subsystems.

Employees are one of the most important components of a company. Other elements crucial to the
success of a business are departments, workgroups, and business units. In practice, managers are
required to evaluate patterns and events in their companies so as to determine the best management
approach. This way, they are able to collaborate on different programs so that they can work as a
collective whole rather than as isolated units.

3. Contingency Management Theory

The main concept behind the contingency management theory is that no one management approach
suits every organization. There are several external and internal factors that will ultimately affect the
chosen management approach. The contingency theory identifies three variables that are likely to
influence an organization’s structure: the size of an organization, technology being employed, and style
of leadership.

Fred Fiedler is the theorist behind the contingency management theory. Fiedler proposed that the traits
of a leader were directly related to how effectively he led. According to Fiedler’s theory, there’s a set of
leadership traits handy for every kind of situation. It means that a leader must be flexible enough to
adapt to the changing environment. The contingency management theory can be summed up as follows:

 There is no one specific technique for managing an organization.

 A leader should be quick to identify the particular management style suitable for a particular
situation.

 The primary component of Fiedler’s contingency theory is LPC – the least preferred co-worker
scale. LPC is used to assess how well oriented a manager is.

4. Theory X and Theory Y

Do you believe that every individual gets maximum satisfaction from the work they do? Or are you of the
opinion that some view work as a burden and only do it for the money? Such assumptions influence how
an organization is run. The assumptions also form the basis of Theory X and Theory Y.

Douglas McGregor is the theorist credited with developing these two contrasting concepts. More
specifically, these theories refer to two management styles: the authoritarian (Theory X) and
participative (Theory Y).

In an organization where team members show little passion for their work, leaders are likely to employ
the authoritarian style of management. But if employees demonstrate a willingness to learn and are
enthusiastic about what they do, their leader is likely to use participative management. The
management style that a manager adopts will influence just how well he can keep his team members
motivated.

Theory X holds a pessimistic view of employees in the sense that they cannot work in the absence of
incentives. Theory Y, on the other hand, holds an optimistic opinion of employees. The latter theory
proposes that employees and managers can achieve a collaborative and trust-based relationship.

Still, there are a couple of instances where Theory X can be applied. For instance, large corporations that
hire thousands of employees for routine work may find adopting this form of management ideal.
Principles of Bureaucratic Theory

Max Weber, a German Sociologist introduced us to a theory called bureaucratic theory of management.
His theory has been characterized by strictness in organizational operations. Weber is one of the
members of classical management philosophy as such his goal also was to increase productivity and
efficiency in the organization. He has suggested six main principles of the bureaucratic theory
of management. Let’s understand each of the principles of Weber’s bureaucratic theory in detail, what
are they, and how they work to increase productivity and efficiency in the workplace.

Hierarchy of Authority

The first principle from the six principles of bureaucratic theory is the hierarchy of authority which
emphasizes the importance of a clear and structured chain of command within an organization.
According to Max Weber, there should be a well-defined hierarchy that outlines the levels of
management and establishes who holds authority and responsibilities at each level.

The hierarchy of authority provides a framework for organizing and managing employees in a systematic
manner. It ensures that employees know their position in the organization, who they report to, and who
they are responsible for. This clarity reduces confusion and enhances efficiency in the workplace.

By clearly defining managerial levels and reporting relationships, the hierarchy of authority enables
effective communication, decision-making, and coordination within the organization. It facilitates the
delegation of tasks and responsibilities, allowing work to be efficiently distributed among employees.

The hierarchical structure also plays a crucial role in maintaining discipline and order in the organization.
It establishes a clear line of authority, ensuring that employees understand their roles and follow the
established rules and procedures.

Work Specialization

The second principle from the 6 principles of bureaucratic theory is the work specialization i.e. division
of work which suggests that complex tasks should be broken down into smaller, more manageable parts.

This allows employees to focus on specific tasks that align with their skills and interests. By assigning
tasks to the right individuals based on their capabilities, organizations can increase efficiency, reduce
errors, and enhance productivity.

In a bureaucratic setting, employees are organized into units or departments according to their expertise
and specialized skills. This ensures that each department has a clear set of tasks and the right employees
to carry them out effectively.

The division of labor based on competencies and functional specializations helps employees understand
their roles and responsibilities within the organization. By dividing work into smaller task sets and
assigning them to individuals with the necessary capabilities, managers can ensure smooth and efficient
task execution.

This approach promotes accountability, as managers can easily track who is responsible for each specific
task. In Max Weber’s bureaucratic theory, employees are expected to focus on their designated tasks
and not exceed their specialty or engage in tasks outside their assigned responsibilities.
Clearly Defined Rules and Regulations

The third principle from the 6 principles of bureaucratic theory of management is clearly defined rules
and regulations that emphasize the need for every organization to establish and adhere to a set of
guidelines that govern its operations. These rules serve as fundamental principles that apply to all
individuals, regardless of their positions within the organization.

By implementing clear rules and regulations, a sense of unity is fostered in the workplace, and better
coordination of employee efforts is achieved. Every employee becomes aware of their roles and
responsibilities, creating a more efficient and harmonious work environment.

Weber emphasizes that all activities within the organization, including grievance management, work
procedures, employee selection, and performance evaluation, should be conducted in accordance with
these established rules.

The rules and regulations should be documented and communicated to ensure that everyone is aware of
them. Additionally, any updates or changes to the rules should be effectively communicated from top
management to lower-level managers and employees.

In Max Weber’s bureaucratic theory, formalized rules serve as a basis for organizing the structure of the
organization, assigning responsibilities, and defining how tasks should be performed. These rules help
employees understand the organizational expectations and contribute to maximizing productivity by
promoting order, clarity, and accountability in the workplace.

Impersonal Relationships

The fourth principle from the six principles of bureaucratic theory is impersonal relationships which
emphasize the need for professional interactions and impartiality within the organization. According to
this principle, employees and managers should maintain a professional distance and treat each other in
an unbiased and objective manner. Personal relationships, emotions, and biases should be set aside in
the workplace, with the focus being on rational decision-making aligned with the organization’s goals.

By promoting impersonal relationships, the principle aims to eliminate favoritism, nepotism, and
external interference in organizational affairs. It emphasizes the importance of fair treatment,
evaluation, and judgment based on performance rather than personal connections. This creates a
harmonious work environment and enhances employee satisfaction, morale, and coordination.

For example, if a father and son work in the same organization, they are expected to maintain a
professional relationship while in the workplace, setting aside their familial ties and avoiding any
preferential treatment or bias.

Formal Selection of Employees

This principle of bureaucracy emphasizes selecting employees based on objective criteria and
established rules. It focuses on technical skills, qualifications, and experience. Hiring is done according to
candidates’ specialties and skills acquired through education and training. Once selected, employees are
placed in suitable positions. Performance evaluation and promotions are based on their contributions.
Compensation is determined by position, and employees cannot hold ownership in the organization.
This principle ensures a fair and transparent recruitment process, where candidates are chosen based on
merit rather than personal connections. It helps organizations employ qualified individuals, leading to
improved performance and productivity.

Career Orientation

The last principle from the six principles of bureaucratic theory is the career orientation principle which
focuses on providing employees with growth opportunities and improving their living standards.

It involves appointing employees to suitable roles, offering job security, economic and social security,
and providing training and development. The organization should value the personal growth of its
employees and motivate them to build long-term careers within the organization.

By selecting candidates based on their skills and competencies, the bureaucratic model ensures that
individuals are placed in roles where they can thrive and contribute effectively. This principle aims to
enhance employee satisfaction, promote skill development, and optimize human capital within the
organization.
Bureaucratic Theory by Max Weber

Bureaucratic Theory: this article explains the bureaucratic theory of the management principles by Max
Weber in a practical way. This article highlights the definition of what is bureaucracy, the characteristics,
the advantages and disadvantages. After reading you will understand the basics of bureaucratic
management and you can use this as a powerful scientific management theory. Enjoy reading!

What is Max Weber Bureaucracy theory?

At the end of the 19th century, it was German sociologist and author of The Protestant Ethic and the
Spirit of Capitalism (1905), Max Weber, also famous of the Social Action Theory who was the first to use
and describe the term bureaucracy. This is also known as the bureaucratic theory of management,
bureaucratic management theory or the Max Weber theory.

He believed bureaucracy was the most efficient way to set up an organisation, administration and
organizations. Max Weber believed that Bureaucracy was better than traditional structures.

In a bureaucratic organization, everyone is treated equal and the division of labour is clearly described
for each employee.

Definition: what is bureaucracy:

Bureaucracy definition: “Bureaucracy is an organisational structure that is characterised by many rules,

standardised processes, procedures and requirements, number of desks, meticulous division of labour
and responsibility, clear hierarchies and professional, almost impersonal interactions between
employees”.

According to the bureaucratic Max Weber theory, such a structure was indispensable in large
organizations in structurally performing all tasks by a great number of employees.
In addition, in a bureaucratic organisation, selection and promotion only occur on the basis of technical
qualifications.

Bureaucratic Theory and legal responsibility

According to the Max Weber theory, three types of power can be found in organizations; traditional
power, charismatic power and legal power. He refers in his bureaucratic theory to the latter as a
bureaucracy.

All aspects of a democracy are organised on the basis of rules and laws, making the principle of
established jurisdiction prevail.

The following three elements support bureaucratic management:

1. All regular activities within a bureaucracy can be regarded as official duties;

2. Management has the authority to impose rules;

3. Rules can easily be respected on the basis of established methods.

What is a bureaucratic organization?

According to this theory of Max Weber, bureaucracy is the basis for the systematic formation of any
organisation and is designed to ensure efficiency and economic effectiveness.

It is an ideal model for management and its administration to bring an organisation’s power structure
into focus. With these observations, he lays down the basic principles of bureaucracy and emphasises
the division of labour, hierarchy, rules and impersonal relationships.

Generally, one can identify a bureaucratic organization based on its regulations.

A bureaucratic organization relies on the use of policies, rules and a strict hierarchy. Additionally, one can
see an enforced chain of command and regulated operating procedures in a bureaucratic organization.

Bureaucratic Theory: the Max Weber’s six characteristics

The Max Weber theory for bureaucratic management points to six principles or characteristics. Below is
a more detailed explanation of the bureaucratic management principles.

The 6 bureaucracy characteristics are:

1. Task specialisation (Specialization and Division of Labor)

2. Hierarchical layers of authority

3. Formal selection

4. Rules and requirements

5. Impersonal (Impersonality and Personal Indifference)

6. Career orientation

1. Task specialisation

Tasks are divided into simple, routine categories on the basis of competencies and functional
specialisations.

Every employee is responsible for what he/she does best and knows exactly what is expected of him /
her. By dividing work on the basis of specialisation, the organisation directly benefits. Each department
has specific powers.

As a result, there is a delineation of tasks and managers can approach their employees more easily when
they do not stick to their tasks. Every employee knows exactly what is expected of him/ her and what
his/ her powers are within the organisation.

Every employee has a specific place within the organisation and is expected to solely focus on his/ her
area of expertise. Going beyond your responsibilities and taking on tasks of colleagues is not permitted
within a bureaucracy.
2. Hierarchical layers of authority

Managers are organised into hierarchical layers, where each layer of management is responsible for its
staff and overall performance.

In bureaucratic organizational structures, there are many hierarchical positions. This is essentially the
trademark and foundation of a bureaucracy.

The hierarchy of authority is a system in which different positions are related in order of precedence and
in which the highest rank on the ladder has the greatest power. The bottom layers of bureaucratic
organizational structures are always subject to supervision and control of higher layers.

This hierarchy reflects lines of bureaucratic communication and the degree of delegation and clearly lays
out how powers and responsibilities are divided.

3. Formal selection

All employees are selected on the basis of technical skills and competences, which have been acquired
through training, education and experience.

One of the basic principles is that employees are paid for their services and that level of their salary is
dependent on their position. Their contract terms are determined by organisational rules and
requirements and the employee has no ownership interest in the company.

4. Rules and requirements

Formal rules and requirements are required to ensure uniformity, so that employees know exactly what
is expected of them. In this sense, the rules and requirements can be considered predictable.

All administrative processes are defined in the official rules. By enforcing strict rules, the organisation can
more easily achieve uniformity and all employee efforts can be better coordinated. The rules and
requirements are more or less stable and always formalised in so-called official reports.

Should new rules and requirements be introduced, then senior management or directors are responsible
for this.

5. Impersonal

Regulations and clear requirements create distant and impersonal relationships between employees,
with the additional advantage of preventing nepotism or involvement from outsiders or politics. These
impersonal relationship are a prominent feature of bureaucracies.

Interpersonal relationships are solely characterised by a system of public law and rules and
requirements. Official views are free from any personal involvement, emotions and feelings. Decisions
are solely made on the basis of rational factors, rather than personal factors.

6. Career orientation

Employees of a bureaucratic organisation are selected on the basis of their expertise. This helps in the
deployment of the right people in the right positions and thereby optimally utilising human capital.
In a bureaucracy, it is possible to build a career on the basis of experience and expertise. As a result, it
offers lifetime employment.

The right division of labour within a bureaucratic organisation also allows employees to specialise
themselves further, so that they may become experts in their own field and significantly improve their
performance.

Advantages and disadvantages of the Bureaucratic Theory

Advantages of the Bureaucratic Theory

Generally speaking, the term bureaucracy has a negative connotation and is often linked to government
agencies and large organisations.

Nevertheless, the great benefit of a bureaucracy is that large organisations with many hierarchical layers
can become structured and work effectively. It is precisely the established rules and procedures that
allow for high efficiency and consistent execution of work by all employees.

All this makes it easier for management to maintain control and make adjustments when necessary.
Bureaucracy is especially inevitable in organisations where legislation plays an important role in
delivering a consistent output. For these organisations the Weber theory provides a solid framework.

Disadvantages of the Bureaucratic Theory

Bureaucracy is characterised by a large amount of red tape, paperwork, many desks, certain office
culture and slow bureaucratic communication due to its many hierarchical layers.

This is the Weber theory’s biggest disadvantage of a bureaucratic organization. It is also unfortunate that
employees remain fairly distanced from each other and the organisation, making them less loyal.
Bureaucracy is also heavily dependent on regulatory and policy compliance.

This restricts employees to come up with innovative ideas, making them feel like a number instead of an
individual. Later research (the human relations theory) demonstrated that employees appreciate
attention and want to have a voice in decision-making. This is something that the Weber theory does not
consider.
Different Management Theories

Scientific Management Theory

In his monograph, The Principles of Scientific Management, Frederick Winslow Taylor advocated
the scientific management theory around 1911. According to this theory, he proposes that working hard
is not a determining factor for improving business goals. Instead, tasks can be simplified systematically to
meet goals.

There are four scientific management principles.

1. Science, Not Rule of Thumb – Finding an objective approach to complete a job, through
constant experimentation

2. Harmony, Not Discord – Creating a positive atmosphere for employees and employers

3. Cooperation, Not Individualism – Both managers and employees should be involved in deciding
and determining standards.

4. Development of each Individual’s Efficiency & Prosperity – From the moment the employee is
hired, they should be put into training and development. Work should be allocated based on
their skills and interest.

Administrative Management Theory

Known as Fayolism, as introduced by Henri Fayol, this theory consists of 14 principles. They are popularly
known as the 14 principles of management.

1. Division of labor

2. Authority and Responsibility

3. Discipline

4. Unity of Command
 5. Unity of Direction

6. Subordination of Individual Interest

7. Remuneration

8. Degree of Centralization

9. Scalar Chain

10. Order

11. Equity

12. Stability of Tenure of Personnel

13. Initiative

14. Esprit de Corps

These 14 principles are based on six types of managerial responsibilities.

1. Organise

2. Command

3. Control

4. Coordinate

5. Plan

6. Forecast

Human Relations Theory

Developed by Professor Elton Mayo, this theory looks into human needs. As part of business
management back in the day, this theory evolved out of the Hawthorne Studies conducted by Professor
Mayo and colleagues.

There are four factors in this theory. Employee, group of employees, supervisors and the
company/organisation. These four factor contribute to six different elements.

1. Treating employees people with a focus on building human relations as opposed to considering
them as machines

2. Promoting positive values through encouraging interaction at workplace

3. Providing effective supervision and removing stress and fatigue among employees

4. Creating healthier working conditions

Contingency Management Theory

Emerging in the 1970s, this theory was proposed by Fred Fiedler. It suggests that leadership should be
adaptable to any situation. There is not one way for organising, but multiple. In this case, the
responsibility falls on the leader, who should be able to adapt according to internal and external factors.

Some of the most crucial factors in the contingency management theory are

 Structure of Work/tasks

 Leader-employee Relationship

 Leader’s power

Fiedler developed a least-preferred coworker (LPC) scale where the leader can highlight the employee
who is the hardest to work with and then rate them.

Systems Management Theory

This management approach considers that an organisation consists of many subsystems. They need not
work together but work for the whole. The different components

This theory originated in the 1950s and provided a holistic perspective on management that the classical
management theory could not.

Theory X and Theory Y

Social psychologist, Douglas McGregor developed this management theory in the 1960s. Theory X and
Theory Y are two contrasting motivational methods that managers should be aware of.

In theory X, the assumption is that employees dislike work because of which they must be coerced to
meet organisational goals. In theory Y, the assumption is that the employee is already interested in the
work. And that, they can already meet business goals through self motivation, provided they get enough
motivation to work. According to McGregor, Theory Y should be adopted in organisations.